Correct or not to Correct, that is the Question

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

Hamlet said it best, “Whether ’tis Nobler in the mind to suffer The Slings and Arrows of outrageous Fortune, Or to take Arms against a Sea of troubles…” Is it time to take profits or seek protective measures against this latest pullback?

Protection could be potentially warranted. But do not misinterpret putting protection as saying bulls should liquidate long positions. The market needs to challenge deeper lows on major indices ($SPY,$QQQ) before I would liquidate positions.

Large-cap stocks, $SPY and $QQQ, are still on an upside move despite the current pullback. This is more of a relief pullback and a potential opportunity to build on longs, rather than a exit signal.

Small-caps ($IWM) have not preformed as well and have lagged to the upside. A break in the $114.5 level on the $IWM would be a negative in this space, and could be a flag for some short-term volatility.

I have my list of bullish ideas that I am looking to nibble on if a pullback does commence. I constructed my list utilizing our Tradespoon Bulls and Bears Screen for the short-term and long-term stocks that have a score of 10/10. These are the most highly rated stocks on our board. When the opportunity shows itself, stocks should be bought on dips.

See you next time at the Corner!